It’s All Relative
We tend not to think of things on an absolute basis; we use others as a frame of reference. Our subconscious brain does a mental audit:
"How am I doing? Hmm, let's see what how people similar to me are doing."
The social media age has created an air-brushed life in which we look at others' posts and feel dissatisfied with our lives regardless of the context.
Someone may look like they are living their best life but we know no more than what we see in the picture; we create the story beyond the image.
It is true with our lives and our money (which are inextricably linked).
We judge our wealth, not by whether it is enough for us and provides us with everything we need but against the benchmark of what other people earn.
And of course, we compare upwards not downwards.
Consider the following scale...
The median average weekly salary in the UK is £640 which is considerably more than the average global salary of £272.
Which is considerably more than the lowest-earning population in the world; Tajikistan at approximately £41 a week.
But we don't feel wealthy because we earn considerably more than the global average, we compare our earnings to a benchmark we can relate to.
Take professional footballers for example:
The median average weekly salary of a League Two professional footballer is £2,000.
But, they compare their earnings with those of players in the league above, League One.
Who earn on average £4,753 a week.
But, they compare their earnings with those of players in the league above, the Championship.
Who earn on average £7,000 a week.
But, they compare their earnings with those of players in the league above, the Premier League.
Who earn on average £60,000 a week.
But, they compare their earnings to the highest-paid Premier League footballers.
Kevin De Bruyne reportedly earns £400,000 a week.
But, he may look at what he earns relative to the highest-paid sports person.
Ronaldo reportedly earns £3.4m a week.
But, that is nothing compared to Elon Musk who earned $10bn in 2022, that's $192,307,692 a week.
Here's another way to compare relative wealth, based on the extremes of the earnings provided here:
the average Tajikistani would have to work 1,363,884 weeks (26,228 years) to earn the equivalent of Elon Musk.
That's a huge disparity in wealth that is hard to get your head around. But what does the amount of money you earn if you are miserable or unfulfilled?
Source for global salaries: https://www.bbc.co.uk/news/magazine-17512040. Converted from $ to £ based on current exchange rate.
Source for UK salary: ONS, 2022 data.
Source for footballers' salaries: https://blog.mansion.com/sports/football/average-salaries-for-players-in-all-four-divisions-of-english-professional-football/
Source for Elon Musk's salary: https://businesschief.com/leadership-and-strategy/top-10-highest-paid-ceos
Stadium Image by Vienna Reyes on Unsplash
Boys playing football image by VietNam Beautiful on Unsplash
#harmoniousmoney